The block, offshore Cape Three Points in the Western Region, contains multiple oil fields and the lender, the Africa Finance Corporation (AFC), a leading infrastructure solutions provider in Africa, has pledged its readiness to “participate in follow-on fundraising activities”.

A statement issued by the AFC, through the African Media Agency (AMA), in Accra yesterday said the investment aligned with the AFC's overall natural resources strategy, which entailed building a portfolio of value-added assets across the energy value chain.

“By taking an early equity financier role in operational or near-operational upstream assets, the AFC can enhance the revenue potential of African states to generate revenue required for investment in infrastructure and social services for its growing populations,” it said.

It added that the investment also marked the beginning of the AFC and Aker's mutually beneficial relationship in the exploration and production sector across the African continent, adding: “The AFC will offer support to Aker, open new opportunities and mitigate potential geopolitical risks.”

The statement acknowledged Aker’s proven track record of delivering complex deep water projects on time and budget, and that with a network of affiliates, such as Aker Solutions, a leading subsea equipment and services provider, “Aker is an ideal partner for the AFC as it seeks to broaden its partnerships with developers within the natural resources sector”.

The AFC already has a wide range of portfolios in Ghana in the financial and the energy sectors.

Background

The AFC's support is through investing in $100 million of convertible bond notes with an intention to participate. The funds will be used by Aker Energy to finance the development of the block owned by joint venture partners, including Aker Energy (50 per cent), Lukoil (38 per cent), Fueltrade (two per cent) and a 10 per cent carried interest for the Ghana National Petroleum Corporation (GNPC).

The Pecan field, which is the most appraised in the DWTCTP block and the field to be developed in the first phase, is an oil field estimated to contain reserves of about 334 million barrels of oil equivalent.

Why the funding

Ghana became a sovereign shareholder in the AFC last year, having acceded to membership in 2011, hence its eligibility to access funding from the corporation. The government will also benefit from the Aker project through increased revenue and government royalty and taxation income.

Ghana is currently reeling under shortfalls in domestic revenue mobilisation and needs to increase its tax efforts.

The DWTCTP field is one of Ghana's principal hydrocarbon assets and is expected to contribute to near-term target of an annual production volume of 500,000 barrels of oil equivalent per day.

Comments

The President and Chief Executive Officer (CEO) of the AFC, Mr Samaila Zubairu, said: "This is an exciting milestone for the AFC — we have partnered with the subsidiary of one of the most highly respected international oil, gas and industrial companies to support its first project in the African market as an operator.

“This is an opportunity for the AFC to invest alongside a technically and financially strong sponsor that requires project development expertise and public sector advice in Africa, both of which the AFC is ideally placed to offer."

The CEO of Aker Energy, Mr Jan Arve Haugan, added: "We value the AFC's vote of confidence by collaborating with Aker Energy and the commitment to further strengthen this partnership, going forward. We believe the AFC will be a valuable partner to help Aker Energy navigate the opportunities and challenges that lie ahead of us."

Local players

Some players in the country’s upstream oil and gas operation have welcomed the move by Aker Energy to swiftly source funding to support its projected budget for the development of the DWTCTP block.  

The Norwegian oil firm recently submitted a $4.4 billion plan for developing Ghana’s fourth independent oil field in the Tano Basin to the Ministry of Energy.  

The Ghana Oil and Gas Service Providers Association (GOGSPA) commended the AFC for showing interest in the development of African projects to improve the lives of its people.  

Speaking with the Daily Graphic, Mr Nuerty Adzeman said: “We want more of such businesses; the oil industry is about funding and building the technical expertise to ensure sustained production.”  
He said the country’s three oil fields, which were currently producing a little over 200,000 barrels of oil per day, were not enough, for which reason there was the need for more exploration and reserves with correspondent funding to extract the resource for national development.
“We are happy companies in Ghana are attracting the attention of the AFC, which is the leading African grade A-rated multilateral development finance institution,” he said.